New local loop 'not needed for bush broadband'

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The head of a national broadband provider in South Australia
says Telstra's prices for intra-state backhaul circuits are
standing in the way of providing broadband to the bush.

Simon Hackett, managing director of Internode, said high-speed
affordable broadband could be delivered to country towns in a year
if the consumer watchdog made access to Telstra long haul regional
fibre into Telstra exchanges available to providers at a reasonable
price.

He said the suggestion that the Government should build a new
local loop network in rural towns was crazy.

"It's now viable to construct new regional local loop networks
in country towns, but the one true economic barrier to 'bush
broadband' is the cost of backhaul back to the big smoke," he
said.

"The Telstra fees to acquire intra-state backhaul from a
regional or remote township remain one of the last bastions of
1980s monopoly pricing. The current cost-per-megabit-per-month from
Telstra for intra-state backhaul circuits is approximately 20 times
too high to make those circuits viable for broadband services
provision by competitors.

"There's a monopoly in access to long haul regional fibre runs
intra-state to 2000 small regional townships across the country.
It's largely a hidden monopoly because its role in wrecking the
economics of competitive regional broadband is largely unsung.

"The Australian Consumer and Competition Commission needs to
declare access to Telstra long haul regional fibre into Telstra
exchanges - simply declare that the Line Sharing Service also
applies to monopoly fibre runs, not just monopoly copper ones."

He said Agile had, over the last four years, built a
microwave-based long haul backbone network into the Coorong region
of South Australia, because Telstra's intra-state backhaul costs
were too high.

Hackett said he had spoken up after hearing of the recent
proposal by National Party "Think Tank", the Page Research Centre,
to spend $7 billion from the proposed sale of Telstra to open up
regional telecommunications outcomes with high speed broadband
networks.

"The crazy thing about such a notion is that neither the market
nor its customers need the government to create new local loops,"
he said.

"Existing copper loops, with a dose of upgrade here and there,
can do that job today. A 24 megabit ADSL2+ service can carry
multiple high definition TV channels and still have 10 megabits
left over for internet access. That bush broadband problem is on a
clear path to solution already, powered by the one enabler it ever
needed - the declared service access to Telstra copper loops."

He said line-sharing of fibre cables was possible through Wave
Division Multiplexing which literally shares access to a
single fibre pair. "It shares it in a manner that allows an
arbitrary number of competitors to access the same fibre pair, with
no detriment to the original use of that fibre by Telstra," he
said. "Multiples of 1 Gigabit per second or 10 Gigabits per second,
on each wavelength, delivered via a low cost WDM device, would
create more contestable bandwidth into a regional town than it
would ever need.

"This will drive change because Telstra only lowers service
pricing due to competition (in contestable markets) or due to ACCC
intervention (in monopoly markets). Intra-state backhaul is a
monopoly market. The required intervention is simple and the
community benefits would be massive."